Gold falls Rs 1,000 to Rs 1,23,400/10g on Fed's cautious tone, US-China trade progress

New Delhi: Gold prices fell by Rs 1,000 to Rs 1,23,400 per 10 grams in the national capital on Thursday amid a firm dollar after the Federal Reserve hinted at a slower pace of rate cuts and progress in US-China trade talks.

The precious metal of 99.5 per cent purity depreciated by Rs 1,000 to Rs 1,22,800 per 10 grams (inclusive of all taxes) from Wednesday's close of Rs 1,23,800 per 10 grams, according to the All India Sarafa Association.

In the local bullion market, gold of 99.9 per cent purity had settled at Rs 1,24,400 per 10 grams in the previous market session.

"Gold prices fell on Thursday following hawkish remarks from Federal Reserve Chair Jerome Powell during his press conference after the policy announcement.

"The US central bank cut interest rates by a quarter point, as expected, but indicated that market expectations for another rate cut at the upcoming December meeting may be premature," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

This development led to an increase in US bond yields and the greenback, putting pressure on bullion, Gandhi added.

Analysts said easing tensions between Washington and China, after President Donald Trump's remarks about a possible trade deal with President Xi Jinping further weighed on gold's safe-haven appeal.

However, silver prices jumped by Rs 3,300 to Rs 1,55,000 per kilogram (inclusive of all taxes) on Thursday. The white metal had ended at Rs 1,51,700 per kg on Wednesday, as per the association.

In the international market, spot gold snapped a four-day losing streak, rising by USD 53.26, or 1.36 per cent, at USD 3,983.87 per ounce.

"Gold prices traded with mild gains on Thursday. The sentiment is driven after US President Donald Trump hinted at allowing nuclear weapons testing amid other nations pushing for nuclear tests, which kept the risk meter elevated," Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said.

Spot silver was quoting 1.21 per cent higher to USD 48.14 an ounce in the overseas markets.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 99.34, which weighed on the yellow metal.

On the market outlook, experts said, "Traders are awaiting further cues from upcoming Federal Reserve officials' speeches for clarity on the rate outlook and near-term bullion direction".